Before the Great Depression of the 1930s, most economists believed that
A. only active government policy could prevent recessions or inflation.
B. a capitalist economy had a natural tendency to cure recessions or inflation.
C. a capitalist economy had a natural tendency to inflation.
D. recessions and depressions were inevitable until the economy broke down completely.
Answer: B
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For the firm in Figure 8.1, the profit-maximizing (loss-minimizing) price and level of output are:
A) P2 and Q2. B) P1 and Q1. C) P4 and Q1. D) P3 and Q1.
Which of the following is NOT one of the economic problems that the "New Economy" is alleged to have solved?
A) deflation B) slow growth in productivity C) the budget deficit D) business cycle
If the government wants to raise tax revenue and shift most of the tax burden to the consumers, it would impose a tax on a good with a:
a. flat (elastic) demand curve and a steep (inelastic) supply curve. b. steep (inelastic) demand curve and a flat (elastic) supply curve. c. steep (inelastic) demand curve and steep (inelastic) demand curve. d. flat (elastic) demand curve and a flat (elastic) supply curve.
The total amount of money that a government owes at a point in time is called:
A. a budget deficit. B. a budget surplus. C. public debt. D. national surplus.